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Bonus Quotation of the Day…

… is from page 31 of the late Melvin Reder’s March 1982 Journal of Economic Literature paper, “Chicago Economics: Permanence and Change“:

[For Chicago economists] [t]he state is considered an agent, and one that is exceedingly difficult to monitor or to control. Therefore the state is to be shunned as an inefficient instrument for achieving any given objective – it is better sought privately – and objectives that cannot be achieved except through the state are to be scrutinized carefully and sceptically. Either the political process will frustrate the achievement of the goals altogether, or will drastically alter them in the process of achievement and, in any case, waste resources.

The argument of the preceding paragraph is sufficient basis for a generally adverse view of government intervention. Any reformer must either refute it, or minimize its importance.

DBx: Mysteriously, however, many Chicagoans – and especially George Stigler – refused to apply this realistic understanding of the state to antitrust. While Chicago scholarship did much good to justify the consumer-welfare standard for antitrust, Stigler and many other Chicago economists continued to assume, contrary to the evidence, that antitrust legislation was adopted for the purpose of ensuring competition and helping consumers.


Pictured above are Milton Friedman (1912-2006), George Stigler (1911-1991), and Aaron Director (1901-2004) in 1947, at the first meeting of the Mont Pelerin Society. (Director, by the way, was born in Ukraine – as was his younger sister Rose [1910[?]-2009], who married Milton Friedman.)

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